Alamo Group Inc. Common Stock (ALG)

FairStock Score: 46/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I am looking for durable businesses bought at a discount, and Alamo is a cyclical equipment maker, not a wide-moat compounder. It sells vegetation-management and industrial equipment into government, agricultural, and industrial markets, where demand follows the economic cycle. The balance sheet is respectable: debt-to-equity is 0.23 and the Altman Z-Score is 3.76, so solvency does not appear stretched. Free cash flow is $108.9 million trailing twelve months, a 5.8% FCF yield, which gives some real cash support. But the profit record is deteriorating. Filed results show net income of $136.2 million in FY2023, $115.9 million in FY2024, and $103.8 million in FY2025. In fiscal Q2 2026, the quarter ended 2026-06-30, revenue was $450.7 million, net income $30.9 million, and diluted EPS $2.55; in fiscal Q2 2025, revenue was $419.1 million, net income $31.1 million, and diluted EPS $2.57. Revenue improved, but earnings did not. Returns are mediocre: ROE 8.77% and ROCE 5.64%. At the 2026-10-13 close of $155.17, FairStock calculates a P/E of 18.63, P/B of 1.56, and a Graham Number of $134.78, leaving a negative margin of safety of 15.13%. The FairStock Score is 46/100 and Piotroski is 4/9. The Lynch category is cyclical, which fits. I would want a wider discount or evidence of recovering returns before calling this a compelling value. This looks fair-to-fully priced, not bargain-priced.

In plain English: Alamo Group makes mowers and heavy equipment used for roadside vegetation control, farming, and industrial work. Profits have been falling and the company earns only modest returns on the money invested in it, so the business looks somewhat weak right now. At the recent price, the shares look a bit expensive compared with what the company earns and owns.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer